Construction spending increased in December compared to both November and a year ago thanks to growing demand for residential construction, according to an analysis of federal spending data the Associated General Contractors of America released today. Association officials noted, however, that spending on private nonresidential construction was flat for the month and down compared to a year ago while public sector construction spending fell for both the month and the year.
“Demand for new housing remains strong, while demand for nonresidential projects has been variable and most types of public sector investments in construction are declining,” said Ken Simonson, the association’s chief economist. “Contractors coping with rising materials prices and labor shortages are also dealing with the consequences of a nonresidential market that is, at best, uneven.”
Construction spending in December totaled $1.64 trillion at a seasonally adjusted annual rate, 0.2% above the November rate and 9.0% higher than in December 2020. Full-year spending for 2021 increased 8.2% compared to 2020.
Private residential construction spending rose 0.7% in December from a month prior and 12.7% from December 2020. For 2021 as a whole, residential construction spending jumped 23.2% from 2020, with gains of 32.8% for single-family spending and 15.6% for multifamily spending.
Private nonresidential construction spending was nearly unchanged from November to December but increased 9.1% from December 2020. For all of 2021, private nonresidential spending slipped 2.3% from 2020. The largest private nonresidential segment, power construction, rose 0.1% for the month and 4.9% year-over-year. Among other large segments, commercial construction--comprising warehouse, retail, and farm structures--inched up 0.1% in December and jumped 18.4% year-over-year, driven by surging demand for distribution facilities. Manufacturing construction spending fell by 1.9% in December, after 11 consecutive months of growth, but posted a 30.4% gain above its year-earlier level.
Public construction declined 1.6% in December, with decreases in 11 of the 12 categories, and 2.9% year-over-year. For 2021 as a whole, public construction fell 4.2% from 2020. Highway and street construction increased 0.1% from November and rose 0.9% compared to December 2020. Educational construction slipped 1.4% for the month and skidded 8.5% year-over-year. Transportation construction spending fell 3.0% in December and 6.3% year-over year.
Association officials said one reason for the declines in public sector construction spending is that Congress has yet to appropriate most of the additional funds authorized in the Bipartisan Infrastructure Bill signed by President Biden last year. They urged Congress to quickly make those new funds available so state and local officials can make the investments needed to improve the nation’s aging infrastructure.
“The Bipartisan Infrastructure Package’s immediate promise is not being met because Congress has yet to appropriate much of the increased funding,” said Stephen E. Sandherr, the association’s chief executive officer. “It is time to improve our infrastructure and protect those who rely on it.”
Related Stories
Building Technology | Apr 11, 2016
A nascent commercial wireless sensor market is poised to ascend in the next decade
Europe and Asia will propel that growth, according to a new report from Navigant.
Industry Research | Apr 7, 2016
CBRE provides latest insight into healthcare real estate investors’ strategies
Survey respondents are targeting smaller acquisitions, at a time when market cap rates are narrowing for different product types.
Market Data | Apr 4, 2016
ABC: Nonresidential spending slip in February no cause for alarm
Spending in the nonresidential sector totaled $690.3 billion on a seasonally adjusted, annualized basis in February. The figure is a step back but still significantly higher than one year ago.
Market Data | Mar 30, 2016
10 trends for commercial real estate: JLL report
The report looks at global threats and opportunities, and how CRE firms are managing their expectations for growth.
Market Data | Mar 23, 2016
AIA: Modest expansion for Architecture Billings Index
Business conditions softening most in Midwest in recent months.
Retail Centers | Mar 16, 2016
Food and technology will help tomorrow’s malls survive, says CallisonRTKL
CallisonRTKL foresees future retail centers as hubs with live/work/play components.
Market Data | Mar 6, 2016
Real estate execs measure success by how well they manage ‘talent,’ costs, and growth
A new CBRE survey finds more companies leaning toward “smarter” workspaces.
Market Data | Mar 1, 2016
ABC: Nonresidential spending regains momentum in January
Nonresidential construction spending expanded 2.5% on a monthly basis and 12.3% on a yearly basis, totaling $701.9 billion. Spending increased in January in 10 of 16 nonresidential construction sectors.
Market Data | Mar 1, 2016
Leopardo releases 2016 Construction Economics Report
This year’s report shows that spending in 2015 reached the highest level since the Great Recession. Total spending on U.S. construction grew 10.5% to $1.1 trillion, the largest year-over-year gain since 2007.
Market Data | Feb 26, 2016
JLL upbeat about construction through 2016
Its latest report cautions about ongoing cost increases related to finding skilled laborers.